Yahoo Finance Revenue Beat: ElringKlinger AG Exceeded Revenue Forecasts By 5.6% And Analysts Are Updating Their Estimates
It's been a good week for ElringKlinger AG (ETR:ZIL2) shareholders, because the company has just released its latest quarterly results, and the shares gained 8.7% to €7.53. It was a workmanlike result, with revenues of €464m coming in 5.6% ahead of expectations, and statutory earnings per share of €0.88, in line with analyst appraisals. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on ElringKlinger after the latest results.
Check out our latest analysis for ElringKlinger
Taking into account the latest results, the consensus forecast from ElringKlinger's six analysts is for revenues of €1.81b in 2023, which would reflect a credible 4.3% improvement in sales compared to the last 12 months. Earnings are expected to improve, with ElringKlinger forecast to report a statutory profit of €0.82 per share. Before this earnings report, the analysts had been forecasting revenues of €1.83b and earnings per share (EPS) of €0.94 in 2023. So there's definitely been a decline in sentiment after the latest results, noting the substantial drop in new EPS forecasts.
The consensus price target held steady at €9.00, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on ElringKlinger, with the most bullish analyst valuing it at €13.00 and the most bearish at €5.50 per share. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the ElringKlinger's past performance and to peers in the same industry. One thing stands out from these estimates, which is that ElringKlinger is forecast to grow faster in the future than it has in the past, with revenues expected to display 3.4% annualised growth until the end of 2023. If achieved, this would be a much better result than the 0.8% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 6.3% per year. So although ElringKlinger's revenue growth is expected to improve, it is still expected to grow slower than the industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting sales are tracking in line with expectations - although our data does suggest that ElringKlinger's revenues are expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple ElringKlinger analysts - going out to 2024, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 1 warning sign for ElringKlinger you should be aware of.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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